Is Big Data Beneficial for Commercial Airlines Industry or Just a Controversy?

With big data now being used in so many different industries, it should probably come as no surprise to hear that companies in commercial airlines industry have been adopting big data analytics to improve their own businesses. Big data can be a highly versatile tool, something that helps companies be more responsive to change and become more prepared for the future. Airlines have long seen the inherent value in this and have slowly evolved to take advantage of big data’s strengths. The use of big data analytics tools certainly carries with it plenty of benefits that have transformed the airline industry, but at the same time, it has brought with it a bit of controversy as customers have started asking questions over how exactly airline companies are using that data.

One of the most common ways businesses use big data is to improve their marketing efforts, and in this case, commercial airlines are no different. In fact, a recent development has seen the U.S. Department of Transportation approve a special passenger data collection system, essentially allowing airlines to collect personal data on passengers for use in marketing. By collecting detailed information on individual customers, airlines can offer them special deals that are tailored to each passenger. This not only increases the chances of getting a favorable response, but it presents customers with offers they might actually like and take advantage of. The overall goal is to improve the customer experience, and with big data analytics and other tools like clickstream analysis, airlines can get a better measure of how customers think and behave. But many big data analytics efforts go even further than simple data collection. The recently introduced Sabre Marketplace Analytics tool has created a new way for airlines to analyze information such as viewing customer shopping activity, while also tracking travel demand patterns from across the globe. If an airline sees the demand for flights from Los Angeles to Chicago going up, they may alter airfares accordingly. The big data analytics tool takes historical information and predicts demands up to a year in advance. The amount of data can be quite detailed as well, all the way down to the type of travel people prefer to their length of stay. Many airlines are using big data to improve the customer experience in other ways. Based upon the detailed information they’ve collected, airlines can keep track of even the smallest bits of data, from what food certain customers prefer to their in-flight entertainment choices. While this might not be of much use for casual air travelers, frequent flyers will find a great deal of value in airlines that cater to these preferences. Some airlines, like Southwest, have even gained a reputation for excellent customer service, largely thanks to their social media data mining and speech analytics capabilities. All of these new capabilities, however, do come with some degree of controversy. Most obvious is the issue of privacy. People generally feel uncomfortable with the idea of companies collecting information on them, often through means they are not aware of. Customers are also wary of what airlines will do with this data. While most companies will claim that it is only used to provide for a better customer experience, others accuse organizations of taking this data and selling it to third parties as another source of revenue. There are also worries about sharing customer information with government agencies, which in many cases is perfectly legal. Accompanying the concerns over privacy are issued related to security. Even if an airline is fully willing to only use the big data they collect for customer benefits, cyber attacks have become all too common, and that data may be stolen. And there’s good reason to have that worry. In 2014, hackers infiltrated the Japan Airlines database and exposed the personal information of more than 750,000 frequent flyers. The more frequently attacks of this sort happen, the more airline customers will reject the idea of data collection. Though the controversy will likely continue, so will big data use among commercial airlines; the benefits are simply too promising to ignore. If airlines can come up with more secure databases and act responsibly with customer information, the greater the chances customers will be more receptive to detailed data collection. In the meantime, airlines will continue working hard analyzing data to provide for a better customer experience and a more efficient business model.

Author

In 2008, we formed The Artesian Network, LLC, a consortium of nine core marketing and sales professionals focused on finding and proving the repeatable, predictable revenue models for new companies in B2B technology. Though we are a senior team with very high technical adaptability, in recent years we have had demonstrated particular focus in data and network security, very large scale data management and analytics, artificial intelligence and the convergence with robotics and cloud infrastructure development. We are known for providing insights that are uniquely and strategically valuable, even if uncomfortable at times. Since we are involved at the early stage of the company lifecycle, when pursuing the repeatable business model sometimes the data comes in conflict with the original business thesis. This is where having senior counsel becomes crucial.